IDEAS home Printed from https://ideas.repec.org/p/jgu/wpaper/1204.html
   My bibliography  Save this paper

Other-Regarding Preferences, Concerns for Others Opportunities and Violations of Stochastic Dominance—A Choice Theoretic Analysis

Author

Listed:
  • Abhinash Borah

    (Johannes Gutenberg University Mainz)

Abstract

Decision makers with other-regarding preferences may care not just about others’ ex-post outcomes but also about their ex-ante opportunities. In environments of risk, so doing may lead to violations of the property of stochastic dominance that is at the heart of existing theories of decision making under risk, expected utility and non-expected utility alike. We propose choice theoretic foundations for a decision model of otherregarding preferences that accommodates such violations. Our decision model provides a representation of a decision maker’s preferences over lotteries on an allocation-space that is based on (i) a baseline expected utility evaluation and (ii) an adjustment that corrects the expected utility evaluation to account for the decision maker’s concerns about others’ overall opportunities under a lottery.

Suggested Citation

  • Abhinash Borah, 2012. "Other-Regarding Preferences, Concerns for Others Opportunities and Violations of Stochastic Dominance—A Choice Theoretic Analysis," Working Papers 1204, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    • Handle: RePEc:jgu:wpaper:1204
    as

    Download full text from publisher

    File URL: https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_1204.pdf
    File Function: First version, 2012
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 817-869.
    2. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    3. Abel, Andrew B, 1990. "Asset Prices under Habit Formation and Catching Up with the Joneses," American Economic Review, American Economic Association, vol. 80(2), pages 38-42, May.
    4. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    5. Machina, Mark J, 1989. "Dynamic Consistency and Non-expected Utility Models of Choice under Uncertainty," Journal of Economic Literature, American Economic Association, vol. 27(4), pages 1622-1668, December.
    6. Sandroni Alvaro & Ludwig Sandra & Kircher Philipp, 2013. "On the Difference between Social and Private Goods," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 1-27, June.
    7. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    8. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    9. Gary E Bolton & Jordi Brandts & Axel Ockenfels, 2005. "Fair Procedures: Evidence from Games Involving Lotteries," Economic Journal, Royal Economic Society, vol. 115(506), pages 1054-1076, October.
    10. Grant, Simon & Kajii, Atsushi & Polak, Ben, 1992. "Many good choice Axioms: When can many-good lotteries be treated as money lotteries?," Journal of Economic Theory, Elsevier, vol. 56(2), pages 313-337, April.
    11. Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
    12. Michal Krawczyk & Fabrice Le Lec, 2010. "‘Give me a chance!’ An experiment in social decision under risk," Experimental Economics, Springer;Economic Science Association, vol. 13(4), pages 500-511, December.
    13. Marciano Siniscalchi, 2009. "Vector Expected Utility and Attitudes Toward Variation," Econometrica, Econometric Society, vol. 77(3), pages 801-855, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grimalday, Gianluca & Karz, Anirban & Proto, Eugenio, 2012. "Everyone Wants a Chance: Initial Positions and Fairness in Ultimatum Games," CAGE Online Working Paper Series 93, Competitive Advantage in the Global Economy (CAGE).
    2. Stefan Grimm & Martin G. Kocher & Michal Krawczyk & Fabrice Lec, 2021. "Sharing or gambling? On risk attitudes in social contexts," Experimental Economics, Springer;Economic Science Association, vol. 24(4), pages 1075-1104, December.
    3. Guy Kaplanski & Haim Levy, 2017. "Envy and Altruism: Contrasting Bivariate and Univariate Prospect Preferences," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(2), pages 457-483, April.
    4. Bin Miao & Songfa Zhong, 2018. "Probabilistic social preference: how Machina’s Mom randomizes her choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(1), pages 1-24, January.
    5. Luciano Andreozzi & Matteo Ploner & Ivan Soraperra, 2013. "Justice among strangers. On altruism, inequality aversion and fairness," CEEL Working Papers 1304, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    6. Gianluca Grimalda & Anirban Kar & Eugenio Proto, 2016. "Procedural fairness in lotteries assigning initial roles in a dynamic setting," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 819-841, December.
    7. Sylvain Chassang & Christian Zehnder, 2013. "Contracting Without a Plan: A Theory of Informal Justice," Working Papers 1456, Princeton University, Department of Economics, Econometric Research Program..
    8. Dorian Jullien, 2016. "Under Uncertainty, Over Time and Regarding Other People: Rationality in 3D," GREDEG Working Papers 2016-20, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    9. James Andreoni & Deniz Aydin & Blake Barton & B. Douglas Bernheim & Jeffrey Naecker, 2020. "When Fair Isn’t Fair: Understanding Choice Reversals Involving Social Preferences," Journal of Political Economy, University of Chicago Press, vol. 128(5), pages 1673-1711.
    10. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    11. Fudenberg, Drew & Levine, David K., 2012. "Fairness, risk preferences and independence: Impossibility theorems," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 606-612.
    12. Sugden, Robert & Wang, Mengjie, 2020. "Equality of opportunity and the acceptability of outcome inequality," European Economic Review, Elsevier, vol. 130(C).
    13. Engel, Christoph & Goerg, Sebastian J., 2018. "If the worst comes to the worst: Dictator giving when recipient’s endowments are risky," European Economic Review, Elsevier, vol. 105(C), pages 51-70.
    14. Bartling Björn & Grieder Manuel & Zehnder Christian, 2014. "Does competition justify inequality?," ECON - Working Papers 158, Department of Economics - University of Zurich, revised Nov 2015.
    15. Alexia Gaudeul, 2013. "Social preferences under uncertainty," Jena Economics Research Papers 2013-024, Friedrich-Schiller-University Jena.
    16. Stefan Trautmann, 2010. "Individual fairness in Harsanyi’s utilitarianism: operationalizing all-inclusive utility," Theory and Decision, Springer, vol. 68(4), pages 405-415, April.
    17. Sven Fischer, 2005. "Inequality Aversion in Ultimatum Games with Asymmetric Conflict Payoffs - A Theoretical and Experimental Analysis -," Papers on Strategic Interaction 2005-36, Max Planck Institute of Economics, Strategic Interaction Group.
    18. Laurent Denant-Boemont & Olivier L’Haridon, 2013. "La rationalité à l'épreuve de l'économie comportementale," Revue française d'économie, Presses de Sciences-Po, vol. 0(2), pages 35-89.
    19. Krawczyk, Michal & Le Lec, Fabrice, 2015. "Can we neutralize social preference in experimental games?," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 340-355.
    20. Gago, Andrés, 2021. "Reciprocity and uncertainty: When do people forgive?," Journal of Economic Psychology, Elsevier, vol. 84(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jgu:wpaper:1204. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Research Unit IPP (email available below). General contact details of provider: https://edirc.repec.org/data/vlmaide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.